The South Gains as Detroit and the Midwest Suffer

[barbarian]

US car makers are shutting down factories in a bid to avert collapse, but foreign firms operating in the southern US are managing to keep their heads above water.

http://www.youtube.com/watch?v=RNtYtVKYQnY

[Ohio XB]

They make it sound like Mercedes is doing fine and dandy, even though they are asking the European Union for money for a bailout exactly like the Big3 in the US. Tell me this report isn't skewed.


In the region they spoke about in this report all wages are generally lower, not just the auto industry. Every industry on average is lower in wages there than in the northern region of the country. Where would you prefer to work?


The State of Alabama gave Mercedes all kinds of incentives to build their plant there.....


"As it turned out, Alabama offered a stunning $253 million incentive package to Mercedes. Additionally, the state also offered to train the workers, clear and improve the site, upgrade utilities, and buy 2,500 Mercedes Benz vehicles. All told, it is estimated that the incentive package totaled anywhere from $153,000 to $220,000 per created job. On top of all this, the state gave the foreign automaker a large parcel of land worth between $250 and $300 million, which was coincidentally how much the company expected to invest in building the plant."

That is an excerpt from a letter that the CEO of Compuware wrote to Senator Shelby who stated that the Government should not be in the business of assisting manufacturers. Talk about hypocrisy. Senator Shelby is for giving millions of dollars to foreign auto companies in his State, but not assisting American auto companies.


I am just waiting for the day when Mercedes goes to the Alabama government to tell them they are broke, after all the millions that the State invested in it. Their US sales for November fell 31 - 38% depending on who you reference.

Mercedes has such a small market share here in the US.


Steve

[phillyc]

Originally Posted by Ohio XB

They make it sound like Mercedes is doing fine and dandy, even though they are asking the European Union for money for a bailout exactly like the Big3 in the US. Tell me this report isn't skewed.


In the region they spoke about in this report all wages are generally lower, not just the auto industry. Every industry on average is lower in wages there than in the northern region of the country. Where would you prefer to work?


The State of Alabama gave Mercedes all kinds of incentives to build their plant there.....


"As it turned out, Alabama offered a stunning $253 million incentive package to Mercedes. Additionally, the state also offered to train the workers, clear and improve the site, upgrade utilities, and buy 2,500 Mercedes Benz vehicles. All told, it is estimated that the incentive package totaled anywhere from $153,000 to $220,000 per created job. On top of all this, the state gave the foreign automaker a large parcel of land worth between $250 and $300 million, which was coincidentally how much the company expected to invest in building the plant."

That is an excerpt from a letter that the CEO of Compuware wrote to Senator Shelby who stated that the Government should not be in the business of assisting manufacturers. Talk about hypocrisy. Senator Shelby is for giving millions of dollars to foreign auto companies in his State, but not assisting American auto companies.


I am just waiting for the day when Mercedes goes to the Alabama government to tell them they are broke, after all the millions that the State invested in it. Their US sales for November fell 31 - 38% depending on who you reference.

Mercedes has such a small market share here in the US.


Steve

Nice to see a locals perspective!

[Wretched]

Get ready for 'Toyota shock'
December 15, 2008 - 6:43AM

Commentary by Bloomberg's William Pesek

First came the "Sony Shock."

No, not news last week that the consumer-electronics giant is cutting 16,000 jobs - the other shock. For investors, the big one came in April 2003, when shares fell 27% in two days.

Sony's woes may pale in comparison with the still developing ones at Toyota. A "Toyota Shock" may be on the way as the dollar trades around 90 yen and questions abound about a US bailout for Detroit automakers.

The difference this time is that the tough 2009 facing Toyota will be shared by Japan's $US4.4 trillion economy. It's anything but pretty.

Those who argue Japan is better positioned than peers to weather the global crisis have a point. Japan's roughly $US15 trillion of household savings offers a cushion the US, Europe and China lack. Japan also has demonstrated a remarkable ability to live without much growth.

Yet the yen's powerful rally is knocking down one of the three pillars supporting the country, the others being ultra-low interest rates and super-loose fiscal policy. Its gains fly in the face of conditions in an economy that shrank at an annual 1.8% pace in the three months ended September 30. That's where the world's second-biggest economy finds itself.

Rising and Falling

It's often said that Japan is a nation of first-rate companies and third-rate politicians. The trouble is, corporate Japan is more reliant on weak exchange rates than the government admits. Germany's manufacturers often thrive regardless of the euro's value; Japan's often rise and fall with the yen.

The problem for companies such as Toyota, Sony and Canon runs deeper. They are facing the additional obstacle of sinking confidence. Consumers are now the most pessimistic in at least 26 years. Japan's confidence index dropped to 28.4 last month from 29.4 in October.

Prime Minister Taro Aso's popularity is declining as fast as the Nikkei 225 Stock Average. His support rate dropped by almost half to 20.9% in a Yomiuri newspaper poll published last week, from 40.5% a month ago.

Aso's falling fortunes are getting round-the-clock news coverage, reminding voters the nation is becoming rudderless at the worst time possible. It's remarkable how quickly Japan has gone from believing it was immune from the U.S.'s woes to staving off a domestic crisis of its own.

'Falling Apart'

"We need to implement policies to prevent the economy from falling apart," Economic and Fiscal Policy Minister Kaoru Yosano told reporters on December 9. "It's going to be a tough year for the economy next year."

It will get even tougher as the yen bears the brunt of investors' fleeing risky assets. It is already at a 13-year high against the dollar. While governments in Jakarta and Seoul grapple with plunging currencies, Japanese policy makers are at a loss over how to stop the yen from approaching its postwar high of about 79 to the dollar.

What can Japan really do here? The Bank of Japan is far more likely to cut its benchmark interest rate to zero from 0.3% than raise it. The Finance Ministry can sell yen, yet the risk of failure may be too great. If Japan intervened and markets shrugged, the yen's surge could accelerate.

That's when newspaper headlines will be dominated by phrases such as "Deflation Is Back" and "Recession Deepens," further hurting confidence at home. Abroad, a key market for Japanese cars and electronics is in even greater disarray following the US Senate's rejection of a $US14 billion rescue for automakers.

US Disarray

Even if the Bush administration moves to tap a bank-bailout fund to help automakers, it's not clear Detroit would get as much money as it needs to avoid massive job losses.

If not for the millions of US jobs hanging in the balance, the potential demise of General Motors or Chrysler might suit Toyota, Honda and Nissan just fine. Not so when the nation in which they traditionally earn more than half of their operating profit is sliding.

The US's problems are taking their toll Asia-wide. The MSCI Asia Pacific Index lost 3.7% on December 12. Australia unveiled plans to spend an extra $4.7 billion on infrastructure to prevent a recession. And economists say China's economic slowdown is worsening.

Governments were depending on China to pick up the slack as the US edged toward recession. Japan thought Chinese demand would be a stabilizing force in the world's fastest-growing economic region. We can forget that.

The question is what will happen if the yen continues to strengthen, which is likely. The yen seems to win demand either way, whether it's from investors fleeing risky assets, or the falling dollar. A move toward 85 yen can't be ruled out.

That isn't good news for Toyota or the rest of corporate Japan. Investors may have to get used to being shocked.

http://business.theage.com.au/busine...1215-6ydw.html